119 F.

3d 850
97 CJ C.A.R. 1246

UNITED STATES of America, Plaintiff-Appellee,

v.
Bradley GROVER, Defendant-Appellant.
No. 96-1329.

United States Court of Appeals,

Tenth Circuit.
July 21, 1997.

Richard J. Troberman, Seattle, WA (Jeralyn E. Merritt, Denver, CO, with

him on the brief), for Defendant-Appellant.
Charlotte J. Mapes, Assistant United States Attorney, Denver, CO (Henry
L. Solano, United States Attorney, with her on the brief), for PlaintiffAppellee.
Before EBEL, KELLY, and LUCERO, Circuit Judges.
PAUL KELLY, Jr., Circuit Judge.

Defendant Bradley Grover appeals from the denial of his Motion for Return of
Property pursuant to Fed.R.Crim.P. 41(e). We exercise jurisdiction under 28
U.S.C. 1291 and affirm.

Background
2

After a federal grand jury indictment in March 1988, charging him with a
variety of drug-related crimes, Mr. Grover pled guilty to engaging in a
continuing criminal enterprise, 21 U.S.C. 848, and signing a tax return that
was false as to a material matter, 26 U.S.C. 7206(1). On the same day he
entered into the plea agreement, Mr. Grover and the government executed a
separate document entitled "Forfeiture Agreement." Mr. Grover agreed to sell
his residence in Aspen, Colorado, and turn over a portion of the proceeds to the
government. In return, the government agreed not to seek forfeiture of other

property, including a residence in Honolulu, Hawaii, and a business known as

Lounge Lizards, Inc. Also that same day, Mr. Grover and the government
executed an "Addendum to the Forfeiture Agreement," in which Mr. Grover
agreed to surrender the proceeds of his property sale to the government "for the
purpose of bringing a civil narcotics forfeiture action against those proceeds"
under 21 U.S.C. 881, and not to contest the forfeiture.
3

Mr. Grover was sentenced to thirty years in prison on the continuing criminal
enterprise charge, with a concurrent five year sentence for the tax violation. He
was allowed to market and sell the Aspen property, and to keep nearly half of
the proceeds to pay his attorneys and provide for his wife. Just over a year after
he was sentenced, Mr. Grover's counsel sent the government a certified check
in the amount of $286,028.31 from the sale of the property. That same day, Mr.
Grover's counsel and a government representative executed a document entitled
"Satisfaction of Forfeiture Agreement."

The government never initiated a civil forfeiture against those proceeds,

however, and on January 16, 1996, Mr. Grover filed a Rule 41(e) motion for
return of property, arguing that because the five-year statute of limitations on
the civil forfeiture had run, the government was no longer entitled to keep the
money. The district court denied the motion, holding that Rule 41(e) did not
contemplate or encompass the return of property under these facts, and that
even if it did, the equities in the case favored the government. Mr. Grover now
appeals.

Discussion
5

Rule 41(e) provides: "A person aggrieved by an unlawful search and seizure or
by the deprivation of property may move the district court for the district in
which the property was seized for the return of the property on the ground that
such person is entitled to lawful possession of the property." A Rule 41(e)
motion is governed by equitable principles, Floyd v. United States, 860 F.2d
999, 1002-03 (10th Cir.1988), and we review the district court's exercise of its
equitable jurisdiction and its denial of the motion for an abuse of discretion.
United States v. Deninno, 103 F.3d 82, 84 (10th Cir.1996); Frazee v. I.R.S.,
947 F.2d 448, 449 (10th Cir.1991).

Mr. Grover argues that he only surrendered possession of the property, and not
ownership, and that it was the government's obligation to complete the transfer
of ownership by instituting a civil forfeiture. Because the limitations period has
run, Mr. Grover contends that the government may no longer institute a civil
forfeiture, and therefore, legal ownership of the property was never transferred

to the government. We agree with Mr. Grover that "nothing vests in the
government until some legal step shall be taken," United States v. A Parcel of
Land, 507 U.S. 111, 125, 113 S.Ct. 1126, 1135, 122 L.Ed.2d 469 (1993)
(quoting United States v. Grundy, 7 U.S. (3 Cranch) 337, 350-51, 2 L.Ed. 459
(1806)), and that until the government obtains a judgment of forfeiture,
someone else owns the property and may assert defenses unless waived. A
Parcel of Land, 507 U.S. at 127, 113 S.Ct. at 1135. We also agree with Mr.
Grover that in this case no forfeiture has yet taken place. This does not,
however, translate into success for Mr. Grover on the merits of his Rule 41(e)
motion.
7

Rule 41(e) requires that Mr. Grover show he is "entitled to lawful possession of
the property." Whatever the weakness of the government's legal entitlement to
the property, that alone does not establish Mr. Grover's entitlement to
possession. By the terms of the Forfeiture Agreement, under which he has
already received the full benefit of his bargain, Mr. Grover relinquished any
possessory claim he had to the property. That the agreement still required the
government to act in order to secure legal title does not change this fact.

In addition, the equities in this case weigh in favor of the government's

continued possession of the property. In the Forfeiture Agreement, Mr. Grover
agreed not to contest the forfeiture. Thus, he agreed not to contest the
government's efforts to complete the transfer of legal title to the property, and,
necessarily, not to contest the government's possession of the property. In
return, he bargained for and received the government's promise not to seek
forfeiture of other pieces of property which were potentially forfeitable, as well
as the right to market the house and conduct the sale himself, and to keep a
portion of the proceeds. Now, in violation of the terms of his agreement, Mr.
Grover is contesting the government's right to continued possession of the
property.

Mr. Grover asserts the statute of limitations as a grounds for returning the
property. The statute of limitations, however, is an affirmative defense--which
by definition means the asserter of the defense is contesting the action against
him. His Rule 41(e) motion seeks equitable relief, but "he who seeks equity
must come into the court with clean hands." Hocker v. New Hampshire Ins.
Co., 922 F.2d 1476, 1486 (10th Cir.1991) (quotation omitted). Mr. Grover is
asking the court to ignore his own breach of the agreement, while at the same
time asking the court to treat the government's admitted mistake as if it nullifies
any obligations he had under the agreement. To do so would unjustly enrich
Mr. Grover at the government's expense--he would receive all the benefits of
his bargain as well as the money he agreed to transfer to the government in

return for those benefits. Equity cannot be so used.

10

AFFIRMED.